Cost Exam 2
Measures the relationship between the actual number of output units produced and the budgeted (or desired) number of output units/
Measures the relationship between manufacturing resources (inputs) used and the output units produced w/those resources (inputs).
The cost of the resources that the managers expect to consume in order to produce a specified number of output units.
The amounts actually spent for resources consumed in the production of output units.
The effect (measured in dollars $$$) of the difference between a budgeted amount (cost or revenue) and an actual amount (cost or revenue).
The costs of the resources that are assigned to the actual output units produced w/those resources.
A signal that is part of a control system for monitoring results.
A variance provides a signal that op.s didn't....
go as planned.
Accountants focus separately on prices and quantities because in most organizations, one department is responsible for.... a resource and one department is responsible for.... the resource.
If managers learn that cost changes are likely to be permanent, they can update their.... information.
A carefully predetermined price, quantity, or cost that is used as a benchmark for evaluating performance.
The budgeted cost of 1 unit of product.
3 sources of standard costs.
1. Specifications by engineers
2. Previous performance
2 philosophies of standard costs.
4 uses for standard costs.
3. Evaluating performance
4. Controlling costs
2 situations where you should investigate variances.
1. High dollar amt.
2. High percentage of the standard
A measure of the sensitivity of op. income to a percentage change in sales.
Cost Exam 2